The struggling airline is expected to announce a large half-yearly loss on Thursday and plans to cut thousands of jobs.

Truss said today the Australian government was drafting laws that would allow changes to the Qantas Sale Act which stop the airline from being majority foreign-owned.

The announcement came as Prime Minister Tony Abbott told the Coalition party room the federal government would no longer be the "ATM of last resort" for struggling Australian businesses.

Abbott told colleagues that it took courage for government to knock back requests for assistance from iconic Australian businesses, as it has recently done with SPC Ardmona and Holden, but "if you say yes, you will have a queue a mile long".

Qantas refused to confirm reports today the airline could axe 5000 jobs and sell its terminal at Melbourne Airport to show the federal government it is willing to make tough changes to its business practices in exchange for federal funding but acknowledged that the company would make ''tough decisions" to achieve A$2 billion ($2.2 billion) in cost savings over the next three years.

Truss said the Sale Act had distorted the market and inhibited the airline's ability to grow.

''We have indicated an interest in being prepared to seek to legislate to take away the legislative and government-imposed disadvantages that Qantas faces on the domestic market,'' he said.

''We are working on legislation to achieve that.

''The government is philosophically attracted to levelling the playing field.''

Fairfax Media reported two weeks ago that Treasurer Joe Hockey was prepared to throw a lifeline to Qantas in the form of a government-backed debt guarantee, which would give the airline access to cheaper finance.

The Qantas Sale Act requires the airline to keep most of its maintenance, catering, flight operations and training facilities for its international services in Australia.

Labor and the Greens have both vowed to oppose changes to the Act, with six Labor MPs speaking out against the plan in the Labor caucus meeting on Tuesday. One Liberal MP spoke against changes to the Act, arguing that Qantas was already an "8800 pound gorilla" in the domestic air market and would become a "Godzilla" if changes to the Act went through.

If the government pushes ahead with plans to change the Act, it may also struggle to secure the numbers for changes when the new Senate sits from July 1 this year.